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Solving the problem of how to run an affordable social democracy is an economic imperative, and the challenge we must solve if we are to support a human population of 7+ billion.
The inevitable result of the 3 revolutions (industrial, technological and information) is minority population of the core productive ages.
Extended maturation and lifetimes are accompanied with increased resource load to make the total social burden exceed the capacity of the economy to generate taxes to pay for it.
Broader spread of the 3 revolutions in a rapidly expanding global population necessarily drives resource constraint on a finite planet. Finite commodities core to the revolutions, mostly energy, drive up the costs of participation.
This necessitates massive investment in sustainable and renewable replacements for consumable resources.
It is illogical to ask a profit-orientated corporations to voluntarily increase costs to meet non-commercial needs. Snakes can’t jump. And the philanthropy of the rich is a poor replacement for democratically directed investment leveraging specialists.
Our economy has been seriously destabilised by futile attempts to replace real security rooted in a social contract, with the false security of material wealth.
The reason we rescued the banks in 2008 was to protect the money in pensions. The reason we are inflating house prices and stock markets now is to use cash to try and create employment and rebuild social fabric.
We simply cannot force our economy to do our social work.
A Standard of Life
The real objective
Success for a human society means sustainably supporting its population, and that requires balance with the environment. But we must recognise that our environmental problems are fundamentally human problems, that have environmental consequences.
Modern, advanced societies must leverage the specialised skills available in their populations to solve the problems caused by our growing populations. Peace and broad security support the freedom specialists need to innovate, and, just as importantly, engender the broad acquiescence to specialist authority necessary to their efficacy. Without a social contract we cannot have the peace or the freedom we need, nor can we expect specialist contributions to be accepted and leveraged.
That social contract is properly defined in terms of shelter, sustenance and basic services such as health, care, education and information access. We only use money as a substitute measure when we imagine that we cannot deliver the services themselves. But this is only a failure of imagination and effort – there is no real, practical barrier to delivering all basic needs as services.
Universal services automatically prioritise efficient use of resources, because they tend naturally toward the lowest cost means of delivering the services to everyone.
So Nearly There
We already deliver much of the social contract as services
In the UK we already provide free access to health and education to everyone, and we provide free shelter, transport and sustenance for subsets of our society.
We can extend the basic services to every person in need of them with little additional effort, and no additional cost in the medium term. We spend £500Bn a year on social services today, and the same budget will allow us to deliver the services universally, after removing the waste and overhead of centrally-administered, means-tested benefit programs. See WellFair Budget for detailed costing using JRF MIS.
A free bus pass for everyone, community kitchens providing locally-sourced, healthy food, and basic phone & Internet will do it!
Growth and prosperity unleashed
When we deliver on our social contract with services, we liberate everyone to participate in the wealth economy at the level and pace that they desire – without coercion of either labour or employer.
Universal services eliminate the “benefit trap” caused by means-testing, and reinforce the incentive to contribute.
Free local transport and enhanced communications are lifeblood to small and micro businesses. Flexible, socially secure labour is a boon to all enterprise.
A million micro economic contributions are liberated, enriching our lives, demoting consumption and adding economically valuable activity that is otherwise left undone.
No subsidy necessary
Once we take responsibility for delivering our social contract, we will not have to subsidise businesses to create employment. Businesses will have to offer sufficiently attractive pay and conditions to attract workers in a functioning market.
Reduced labour rates make infrastructure investments affordable
Whereas the enforcement of minimum wages push up the monetary costs of investment, providing universal services reduces the cost of labour, in monetary terms, and makes building new housing, upgrading our energy infrastructure, and other social investments more affordable from a reasonable tax on wealth.